JP Energy shareholders will receive $8.63 per common unit, a 14.5 percent premium to the closing price of JP Energy’s common units of $7.54 on Oct. 21.

The transaction is expected to close late this year or in early 2017, per the release. The combined company’s headquarters will be in Houston.

The beefed-up midstream company will operate in the Permian, Gulf of Mexico, Eagle Ford and Bakken regions. It will run more than 3,100 miles of gathering and transportation pipeline.

Boston-based ArcLight Capital Partners LLC, which holds stakes in both American Midstream and JP Energy, will combine the general partners of the two companies. ArcLight owns 15.6 percent of American Midstream and 19.8 percent of JP Energy as of June 30, according to Reuters.

Lynn Bourdon III — currently the chairman, president and CEO of American Midstream — will serve as chairman and CEO of the combined company, and Eric Kalamaras — currently the CFO of American Midstream — will serve as CFO.

“This transformational combination is the next logical step in expanding services from the wellhead to the end user market,” Bourdon said. “We will begin to experience the impact of our value chain growth strategy by offering customers a more competitive suite of services that enables us to capture incremental fee opportunities that maximize returns to unitholders.”